Sales Taxes vs. Property Taxes
Well, the idea of adding to the sales tax at the county level to reduce the property tax burden has been floated by one of our erstwhile county commissioners. The city, as I understand it, is considering bring an additional sales tax to the ballot in November, again with the idea of reducing the property tax levy.
Without getting into the regressive nature of sales taxes vs. the somewhat progressive nature of property taxes, the ideas floated are bad, at least as the Kansas Retail Sales Tax is currently implemented. First and foremost, Kansas is among the minority of states that imposes a sales tax on all food purchases (yes, I'm aware that no sales taxes are charged when qualifying items are purchased by the Vision Card, a/k/a food stamps, WIC certtificates, and possibly other low income assistance programs). That is why the sales tax in Kansas is particularly regressive, taking a proportionately larger share of a buyer's disposable income for taxes than, e.g., property taxes.
The concept underlying property taxes to fund governmental operations is simply this: if a person can afford to acquire the property, he/she likely has the means to pay the taxes imposed upon the same. A flawed premise in some cases, but valid in many others.
What should be considered by the Kansas Legislature is to eliminate the sales tax on basic foods (not frozen dinners, not purchases from the Dillons "cafe", etc.) such as meat, vegetables, milk, bread, flour, eggs, sugar, etc. Having lived for four years in Indiana, which exempts basic food items from sales taxes, it can and is done with success. The offset is, of course, a higher rate of sales tax on other purchases.
I believe Maine's three-tiered sales tax system is worthy of study by Kansas. The system works like this: basic foods, pharmacy items, are exempt from sales taxes. The basic sales tax level of 5.9% (IIRC) is imposed upon the next level of purchases, not true "necessities", things like clothing, gasoline, telephone service, etc. The next tier (about 7%) is imposed on purchases of vehicles (new and used), tires, other accessories of that nature. The highest tier (8.5%) is imposed upon things such as automobile rentals, hotel/motel reservations, meals in restaurants, etc., to reap benefits from the tourists who make up a high percentage of the Maine economy. Obviously, Kansas does not have this tourism "piece", but we do have the "pass through" crowd on the way to ultimate destinations, from whom we might extract some money.
What does anyone think (assuming anyone even checks here anymore, given the length of my hiatus from this spot)?
I think the suggestion from the county commissioner is because it's an election year and that translates to silly season. making noises of lower property taxes will be all that's herd by too many!
Of course, sales tax hurts the poorest (doing it without help) the most and many are barely making it. I agree sales tax of the basic necessities of life should be lifted as most states have. Why is Kansas always a decade or so behind? I visited Nebraska last year and their sales tax on food is levied on food that can be eaten right now (deli, restaurant...) and not levied on those food items you take home to prepare. I probably didn't explain that well, hope you get the general gist. I hadn't heard how Maine handles sales tax and their way does sound more progressive than what is done in Kansas!
Property taxes are high! We have to put aside $250/month in order to pay the taxes and insurance on the house. That's a bunch! I can remember when our house payments including a reserve account weren't that high. In fact, the house we currently live in is the only one we had payments higher than we currently pay just for the taxes and insurance. I honestly don't know how families make it today! Wayne and I are cutting back out of necessity and we don't have children to feed, clothe, educate and keep healthy.
Why can't our city and county cut back too? You know there is waste in every budget from mine and yours to each level of government. In tough times cutting back and eliminating the frivolous is required.
Yes, Kansas property taxes are higher, I'm told, than in most of the adjacent states. When one looks at the total tax structure of those states, however, one finds that the total tax burden (sales, property, income, excise, etc.) in those states is equal to or greater than that of Kansas.
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